Report Summary 1. Investment Rating The provided content does not mention the industry investment rating. 2. Core View As of the reporting date, the commodity shipment volume remained high, and the demand for mainstream vessel types increased. The demand for Panamax and (large) Handysize vessels increased significantly, and the BPI and BSI&BHSI freight rate indices continued to strengthen significantly on a week-on-week basis, supporting the BDI composite freight rate index to maintain a relatively high increase. With the high demand for both agricultural and industrial product shipments, dry bulk carriers continued to benefit, and the spot freight rate index maintained an upward trend [1]. 3. Summary by Relevant Catalogs 3.1 Spot Index Review - **BDI Freight Rate Index Analysis**: Compared with the data on September 5th, the week-on-week increase of the mainstream vessel type freight rate indices continued to be significant. The BPI freight rate index increased by more than 10%, and the BSI&BHSI freight rate indices increased by more than 2%. Specifically, the BDI composite freight rate index closed at 2,126 points, up 7.43% week-on-week; the BCI freight rate index closed at 3,070 points, up 8.29% week-on-week; the BPI freight rate index closed at 2,006 points, up 11.32% week-on-week; the BSI freight rate index closed at 1,492 points, up 2.47% week-on-week; the BHSI freight rate index closed at 804 points, up 2.16% week-on-week [5]. - **FDI Far East Dry Bulk Freight Rate Index**: On September 12th, the FDI composite index, FDI rent and freight index, and FDI spot freight index all declined, with a decline of about 1%. However, the rent and freight of most Panamax vessels in the FDI rent and freight index increased on a week-on-week basis. Specifically, the FDI composite freight rate index closed at 1,346.02 points, down 1.13% on a week-on-week basis; the FDI rent index closed at 1,654.83 points, down 1.37% on a week-on-week basis; among them, the Capesize vessel rent index closed at 1,742.12 points, down 3.19% on a week-on-week basis; the Panamax vessel rent index closed at 1,547.57 points, down 0.11% on a week-on-week basis; the Handymax vessel rent index closed at 1,645.72 points, up 0.09% on a week-on-week basis; the FDI freight rate index closed at 1,140.14 points, down 0.89% on a week-on-week basis [9]. 3.2 Dry Bulk Shipment Situation Tracking - **Number of Vessels Used for Shipment in Sending Countries on the Day**: On September 15th, among the major agricultural product sending countries, Brazil used 50 vessels for shipment, Russia used 11 vessels, Argentina used 25 vessels, Ukraine used 1 vessel, Uruguay used 0 vessels, and Australia used 0 vessels. Among the major industrial product sending countries, Australia used 52 vessels, Guinea used 33 vessels, Indonesia used 41 vessels, Russia used 17 vessels, South Africa used 17 vessels, Brazil used 15 vessels, and the United States used 11 vessels [19]. - **Analysis of Shipment Volume and Vessel Usage on the Day**: In terms of agricultural product shipments, 23 vessels were used for corn shipment, 17 vessels for wheat shipment, 19 vessels for soybean shipment, 15 vessels for soybean meal shipment, and 13 vessels for sugar shipment. In terms of industrial product shipments, 100 vessels were used for coal shipment, 66 vessels for iron ore shipment, and 17 vessels for other dry cargo shipments. By vessel type, the shipment of agricultural products required the most Post-Panamax vessels, reaching 39; followed by 17 Handymax vessels; and finally 21 Handysize vessels. The shipment of industrial products required the most Capesize vessels, reaching 92; followed by 67 Post-Panamax vessels; and finally 45 Handymax vessels [20]. 3.3 Tracking of the Number of Vessels at Major Ports In mid-to-late September, the number of vessels docked at major global ports increased significantly. Except for the number of vessels at Australian ports remaining unchanged on a week-on-week basis, the number of vessels at other ports increased on a week-on-week basis, especially at major Chinese ports. Specifically, the number of dry bulk vessels docked at Chinese ports was expected to increase by 13 on a week-on-week basis, the number of vessels docked at six Australian ports increased by 12 on a week-on-week basis, the number of vessels docked at South African ports increased by 1 on a week-on-week basis, and the number of vessels docked at Brazilian ports increased by 3 on a week-on-week basis [20][21]. 3.4 Relationship between Freight and Commodity Prices - **Brazilian Soybeans**: On September 12th, Brazilian soybeans were priced at $39 per ton. On September 15th, the near-term shipping quote for Brazilian soybeans was 4,080.61 yuan per ton. - **Iron Ore**: On September 11th, the latest quote for the BCI C10_14 route freight was $26,620 per day. On September 12th, the latest quote for the iron ore CIF price was $123.1 per thousand tons. - **Steam Coal**: On September 11th, the latest quote for the BPI P3A_03 route freight was $14,456 per day. On September 12th, the latest quote for the steam coal CIF price was 544.6 yuan per ton. - **Logs**: On September 12th, the Handysize vessel freight rate index was quoted at 796.8 points. On September 12th, the CFR price of 4-meter medium ACFR radiata pine was quoted at $114 per cubic meter [25].

Investment Rating - The report initiates coverage with a "Buy" rating for Haitong Development [3][9][11]. Core Views - Haitong Development is a private enterprise engaged in domestic coastal and international bulk cargo transportation, with foreign trade becoming its core business. The foreign trade revenue share is expected to increase from 29% in 2020 to 65% in 2024, contributing 93% to gross profit in 2024. The company adopts a strategy of purchasing second-hand ships for expansion, maintaining a balance between scale and stability. The company has significant operational flexibility, with a projected net profit increase of approximately 530 million yuan for every $5,000/day rise in freight rates [3][7][9]. Company Overview - Haitong Development, established in 2009, specializes in domestic coastal and international bulk cargo transportation. The company has built a fleet of large handy bulk carriers, controlling a total capacity of 4.84 million deadweight tons as of mid-2025, ranking ninth globally in large handy bulk carrier capacity [6][33]. Business Expansion - The company has expanded its foreign trade business significantly, with foreign trade revenue share projected to rise from 29.3% in 2020 to 65.0% in 2024. The foreign trade business is expected to contribute 92.7% to gross profit in 2024. The company primarily operates on a time-charter basis, which presents lower risk exposure compared to voyage chartering [7][39]. Industry Analysis - The dry bulk shipping industry is expected to see a gradual recovery, with domestic supply likely to clear out. The average age of domestic dry bulk vessels is 11 years, with a significant portion being older than 18 years. A subsidy policy for scrapping old vessels is expected to accelerate the exit of older ships from the market, tightening supply [8][59][63]. Financial Performance - The company exhibits strong financial metrics, with a return on equity (ROE) of 14.2% and a low debt-to-asset ratio of 29.4% in 2024, providing a solid foundation for future expansion [7][49]. The projected net profits for 2025, 2026, and 2027 are estimated at 300 million, 620 million, and 750 million yuan, respectively, with corresponding price-to-earnings (PE) ratios of 26.5, 12.9, and 10.7 [9][11].

Core Viewpoint - In the first half of 2025, shipping stocks experienced significant volatility due to tariffs and geopolitical conflicts, but overall showed an upward trend, with the Shenwan Shipping Index rising by 1.9% year-to-date, outperforming the CSI 300 Index by 4.1 percentage points [1][2]. Shipping Industry Overview - The shipping sector is characterized by a strong cyclical nature, with a clear positive correlation between high-frequency freight rates and stock prices. In the container shipping segment, a phase of increased shipping activity has enhanced freight rate elasticity, with the China Containerized Freight Index (CCFI) remaining at a high level [2]. - The oil shipping market benefited from increased production by oil-exporting countries and intensified U.S. sanctions, leading to a recovery trend in freight rates, although the Baltic Dirty Tanker Index (BDTI) saw a year-on-year decline due to a high base from the previous year [2]. - The dry bulk shipping market faced a weaker outlook in the first half of 2025, with high coal and iron ore inventories leading to a decline in the Baltic Dry Index (BDI) [2]. Container Shipping - Container shipping capacity continues to be delivered, with demand significantly impacted by tariffs and geopolitical tensions. Despite fluctuations in freight rates due to changing tariff policies, the overall market remains relatively strong. The demand growth for ton-miles is projected at 2.6% for 2025 and -2.9% for 2026, assuming the Red Sea remains closed in 2025 [3]. - Freight rate outlook for the second half of 2025 suggests a return to normal seasonal variations after a high-level decline, with smaller vessel types facing less delivery pressure and emerging markets showing better prospects than mainline routes [3]. Oil Shipping - The oil shipping market is heavily influenced by geopolitical conflicts, with a favorable supply-demand balance for Very Large Crude Carriers (VLCCs) in 2025. The first half of 2025 saw freight rates fluctuate due to Middle Eastern conflicts and increased U.S. sanctions on Iran [4]. - Demand growth for oil ton-miles is expected to be 0.5% for 2025 and -1.3% for 2026, with limited growth in VLCC capacity projected at 0% for 2025 and 2.5% for 2026 [4]. Dry Bulk Shipping - The dry bulk shipping sector is expected to see a year-on-year decline in market conditions, with a focus on iron ore trade ton-miles improvement in 2026. High inventories of bulk commodities have led to a slowdown in transport volumes, with demand growth projected at -0.8% for 2025 and 0.9% for 2026 [5]. - Freight rates are anticipated to experience slight recovery in Q3 2025, but overall market conditions are expected to remain weaker than the previous year [5]. Investment Opportunities - In the second half of 2025, the focus should be on the regional container shipping market, benefiting from increased inter-regional maritime trade, with freight rates remaining relatively high. Notable companies to watch include DeXiang Shipping, HaiFeng International, and ZhongGu Logistics, which are expected to show significant growth in the first half of 2025 [6]. - There are also opportunities for left-side positioning in oil tanker stocks, which currently have relatively low valuations and significant upside potential during peak seasons or in the event of regional conflicts. Companies like COSCO Shipping Energy and China Merchants Jinling are recommended for consideration [6].